Glossary of energy-sector terms and phrases

WattClarity® began in 2007.

Since that time there have been hundreds of articles posted, and increasingly we’ve found ourselves posting articles specifically focused on assisting with different aspects of  energy literacy (at least in part because of the challenges this represents in our energy transition).  In the table below, we’ve started collating some of these explanations, for easier future reference:

(Generators) Avoiding Negative Prices Based on increased interest from a range of generators (both Scheduled/Semi-Scheduled and also Non-Scheduled) in avoiding periods where trading prices are negative, we’ve put this focused page together.
Bidding and Dispatch Process This page provides an explanation, and links to other resources progressively developed on WattClarity over the years.
Conformance Status Sometimes the terminology ‘Compliance Status’ is used interchangeably.  We like to think about it in the following terms:
1)  AEMO determines ‘Conformance Status’ as part of their process of balancing supply and demand; whereas
2)  AER focuses on ‘Compliance Status’ in terms of whether generators specifically follow Market Rules.
Connection Point Dispatch (CPD) Price Here’s a page explaining the Connection Point Dispatch (CPD) Price used in ez2view, and in the Generator Statistical Digest 2019
Credible Contingency What AEMO means by “Credible Contingency” – and, by extension, a “Non-Credible Contingency” was explained here by Allan O’Neil in the context of the bushfires of summer 2019-20.
Cumulative Price The Cumulative Price, and the Cumulative Price Threshold (and what this means for Administered Pricing) are all explained here.
Demand This page provides an index to explanations on WattClarity.
Demand Response “Demand Response” is a term used to a range of activities undertaken by electricity users to temporarily curtail consumption (or effectively lower net consumption from the grid through use of onsite generation) in response to some form of commercial incentive.

Given our keen interest in assisting with demand response at large energy users we established this focused site to help readers understand more about the different ways in which it might work.

Dispatch Error The ‘Dispatch Error’ is a formal calculation of the magnitude of deviation for a unit away from its Dispatch Target in a dispatch interval:

Dispatch Error = Dispatch Target – Final MW

‘Dispatch Error’ can be aggregated for groups of units – which AEMO does in an ‘Aggregate Dispatch Error’ (ADE).

We use ‘Dispatch Error’ as an input into calculating ‘Raw Off-Target‘ and hence to deriving ‘Conformance Status‘.

Dispatch Target At the beginning of each dispatch interval, each Scheduled and Semi-Scheduled unit* will receive a Dispatch Target, indicating where the AEMO expects the unit to be at the end of the Dispatch Interval.  The implications of this Dispatch Target are different for Semi-Scheduled units than they are for Scheduled units.

  Non-Scheduled units do not receive Dispatch Targets.

Because of the logistics of the process, this means that a units Dispatch Target will typically be received in the Participant’s MMS about 20 seconds into the Dispatch Interval.

DRM

(Dispatchable Reserve Plant Margin)

In the creation of our Generator Report Card (released 31st May 2019) we included analysis of a Dispatchable Reserve Margin, which was modelled on the IRPM that had been in use for many years,
DUID
(or unit)
AEMO terminology for Dispatchable Unit Identifier, the atomic level at which the NEM is dispatched.

Historically a DUID mapped most often to a discrete physical unit, but this was not always the case.  With the the introduction of Semi-Scheduled Wind and Solar plant, the whole station will typically be registered as a single DUID.

FCAS On this Glossary page here, we’re progressively fleshing out an explanation of various aspects of FCAS as it currently operates in the NEM.
FCAS Cost Recovery FCAS costs are recovered from the market in different ways:

Method 1)  Because it’s loss of supply that is the most likely cause of the need for Raise Contingency services, the costs of enabling FCAS Contingency Raise Services are recovered from all generators.

Method 2)  Because it’s loss of supply that is the most likely cause of the need for Raise Contingency services, the costs of enabling FCAS Contingency Raise Services are recovered from all loads (i.e. which are wholesale Market Customers (mostly retailers and some spot-exposed large energy users) and Scheduled Loads)

Method 3)  In contrast, the costs of FCAS Regulation services are recovered from all wholesale participants using a complex ‘Causer Pays’ methodology.

The Generator Statistical Digest 2019 went some way to establishing some transparency in this respect by calculating these costs for all DUIDs for each month through calendar 2019.

FCAS Revenues Describe later.
Fast Start Here’s a page explaining the Fast Start Inflexibility Parameters (FSIP) which NEMDE takes account of in dispatch
Forecasts We’re progressively fleshing out a page here to explain the various different types of forecasts provided by the AEMO under the NEM Rules.
IRPM

(Instantaneous Reserve Plant Margin)

The Instantaneous Reserve Plant Margin is explained here.
Low Reserve Condition The AEMO uses a three-level warning system alerting the market to actual, or forecast, periods of Low Reserve Condition – LOR1, LOR2 and LOR3.

This is described further here.

Market Price Cap The Market Price Cap sets the maximum level the dispatch price can reach through the dispatch process. It has been adjusted over time.
Market Price Floor The Market Price Floor sets the lowest level the dispatch price can reach through the dispatch process.
Non-Scheduled Category An explanation of how the Non-Scheduled category works is provided here in this Glossary.
Off-Target In the creation of our Generator Report Card (released 31st May 2019) we included analysis of a the extent to which individual generators might be Off-Target.

The way this is calculated is discussed here.

Price Energy Harvest Here’s a page explaining the concept of ‘Price Energy Harvest’ used in ez2view
Price Setter The price setting process is quite complicated – on WattClarity there are several articles published to help explain.  These are all linked together here.

In Part 3 of our Generator Report Card (released 31st May 2019) we a view of how often a particular DUID has been heavily involved in setting the price in a given region.

(Bidding and) Rebidding This Glossary section includes this page about the Rebidding Process, and AER Rebidding Guidelines – including what it means to be (in our view) “Not Well Formed”.
Reliability How ‘Reliability’ is formally defined in the NEM – and how it is often confused – is explored on this page here.
Scheduled Category An explanation of how the Scheduled category works is provided here in this Glossary.
Security of Supply How ‘Security of Supply’ is formally defined in the NEM – and how it is often confused – is explored on this page here.
Semi-Scheduled Category An explanation of how the Semi-Scheduled category works is provided here in this Glossary.

If you see that there are other ways we can help you (and/or the broader energy sector):
(a)  Please give us a call on +61 (0)7 3368 4064 ; or
(b)  Provide your feedback here.